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Oracle customers may be pleased to find out that they can now deploy a number of Oracle software solutions within the Amazon Elastic Compute Cloud (EC2) as fully supported production environments. For existing Oracle users, this collaboration should provide for a fast and simple way to migrate or deploy Oracle applications into Amazon's cloud without hefty upfront hardware costs, and users can leverage Amazon's utility-based pricing model.

Under the new partnership agreement between Amazon Web Services (AWS) and Oracle, a portion of Amazon's cloud infrastructure will be designated to operate on Oracle's virtualization technology. That's an important distinction -- these applications will not be running on Amazon's Xen-based hypervisor like all other application environments currently being served up by Amazon's cloud. Instead, they will run on Oracle VM, a hypervisor technology that is also based on Xen. But because it is also based on Xen, it shouldn't be a major transition for Amazon to offer support for it -- at least not as much as if they were adding VMware ESX or Microsoft Hyper-V into the mix.

Oracle said customers could use their existing Oracle licensing on the Amazon EC2 environment at no additional cost, or users could acquire new licenses from Oracle. This all sounds great; however, the announcement wasn't very clear as to what the rules were for reusing existing licenses or under what circumstances a new license might need to be acquired. In the not so recent past, Oracle licensing seemed somewhat draconian when it came to virtualization; while this announcement around licensing does seem welcome, it was also a bit cloudy on the details.

Beyond the licensing questions, if an Oracle customer wants to make the move to Amazon's cloud, Oracle and Amazon said they would help speed things up by offering a set of preconfigured Amazon Machine Images (AMIs) that are based on Oracle VM Templates so that customers can quickly deploy these environments on Amazon EC2. Initially, these AMIs will include Oracle Linux, Oracle Database 11gR2, Oracle E-Business Suite, and Oracle Fusion Middleware technologies, including Oracle WebLogic Server and Oracle Business Process Management. Oracle also has plans to add future AMIs that will include PeopleSoft Enterprise, Siebel CRM, and JD Edwards applications.

The announcement seems like an interesting move for both Oracle and Amazon.

On Oracle's end, the company was able to convince Amazon to run Oracle VM as one of its hypervisors. Oracle is a relative newcomer to the virtualization hypervisor market, only entering back in 2007. While it competes directly with Citrix XenServer, Microsoft Hyper-V, and VMware ESX, it certainly hasn't proven itself very popular, at least in terms of market share. In spite of that, Amazon has given Oracle VM a bit of credibility by adding it into its cloud offering, if for no other reason than for Amazon to pick up Oracle software licensing and product support.

The move also allows Oracle to offer anyone using Oracle VM the opportunity to port their own virtual machine images from their private data center to Amazon EC2 and vice versa. This could increase competitive pressures on VMware and Microsoft, as Oracle makes it clear it intends to own the full virtualization stack.

Amazon, on the other hand, will use this opportunity to expand its cloud into the more lucrative enterprise market. Currently, Amazon EC2 is well known for the Web-only and the testing and development markets. By partnering and being able to offer Oracle's enterprise applications to its customers, Amazon gains quick credibility within the enterprise market.

In the beginning, we should probably expect that the majority of Oracle customers migrating over to Amazon Web Services will be part of that dominant Amazon market of test and development in the cloud. The question will be whether or not they can expand that further into production, enterprise environments -- that part of the market that still eludes them.

According to the company, Exalogic Elastic Cloud is engineered for large-scale, mission-critical deployments, and it provides the foundation for enterprise-class multitenancy or cloud applications. The cloud environment can scale to support thousands of applications with differing security, reliability, and performance requirements -- making it an ideal platform for enterprisewide data center consolidation.

Unlike Amazon EC2, it sounds like Oracle intends Exalogic to operate from behind the customer's firewall rather than Oracle creating a public cloud service of its own.